The New Economic Patriotism: A Look At Obama’s 27-Point Economic Plan
This is PART 2 (Small businesses, education, deficit, healthcare, and social security) | If you missed the first part, please click HERE to read PART 1 (Manufacturing and energy)

This article discusses the last five sets of President Obama’s proposals for growing small businesses, revamping education, eliminating the deficit, reforming healthcare, and shoring up Social Security. For the article on Obama’s first two proposals to revive U.S. manufacturing and increase domestic energy production, please read Part 1.

According to Obama’s booklet, he’s signed 18 small business tax cuts into law, and is fighting to keep income taxes low for 97% of all small business owners.

Growing Small Businesses (points 11-14)

Despite three decades of metastasizing global corporations and mega-stores, Americans still have a soft spot for local mom-and-pop shops, picturesque little farms, eccentric family restaurants, and trail-blazing tech firms fledged in the neighbors’ garage. The scrappy small-biz-(with-a-heart)-that-can is as deeply ingrained in America’s collective romantic imagination (and yes, there is such a thing) as Thanksgiving, the Statue of Liberty, July 4th, and apple pie. Small businesses are also a huge part of our economy. According to the Small Business Administration, 27.9 million small firms (companies with fewer than 500 employees) account for 64% of net, new, private-sector jobs and 49.2 percent of private-sector employment.

Many small businesses struggle in markets that favor the economies of the (large) scale enjoyed by heftier corporate competitors — as any owner or sole proprietor applying for lines of business credit, paying full boat for inventory and supplies, and covering payroll taxes and health insurance would readily agree. To offset these disadvantages — and help jump start our sluggish economy — Obama has renewed, expanded, and enacted 18 tax breaks for small businesses during his administration and wants Congress to maintain or renew all of them, in addition to implementing new ones. Unfortunately — as CNN Money‘s Jose Pagliere explains — only five of these tax cuts and incentives still exist in their original form, and only an additional five remain in a weaker form.

As the GOP’s intransigence hurtles us swiftly towards that ever-looming “fiscal cliff” of expiring tax breaks and automatic budget cuts, the President wants to maintain and expand existing tax breaks while creating new ones for small businesses, as follows:

11. Give tax breaks for hiring and equipment purchases. Substantial tax breaks for hiring new staff and buying new equipment — 50% of which owners and sole proprietors can write off immediately instead of gradually depreciating over several years — helps small businesses invest in their own growth, since banks clearly refuse to do so.

12. Extend tax cuts for middle class families. The majority of small business owners — along with many of their employees — are part of our middle class and need all the help they can get in order to stay afloat. Unlike hourly or salaried workers earning steady paychecks, small business revenues are often up-and-down or seasonal, while their expenses remain consistent. In addition, owners and sole proprietors also pay double what the rest of us hand over in payroll taxes because they don’t have an employer to cover half of their share.

13. Expand Obamacare tax credits. Since sole proprietors and small business owners currently pay up to 18% more than larger companies in health insurance premiums to cover themselves, their families and their employees — often with inferior health plans — Obama’s Affordable Health Care Act is a huge and positive change for them. The President’s plan calls for a tax cut that would cover 50% of health coverage costs for small businesses.

John Arensmayer from HuffPost’s Small Business America reports that polls of small business owners – a majority of whom say they’re Republicans — indicate strong support for the goals advanced by the President’s 27-point plan:

“… these job creators want spending and tax policies targeting the majority of small businesses to be preserved and ones that benefit only a few removed. By nearly a 2:1 ratio, they believe spending cuts for education, healthcare and infrastructure would hurt the economy more than a tax increase on the wealthiest 2 percent.”

In addition:

“A sweeping 86 percent of small employers oppose raising tax rates on households with income below $250,000″ and “agree raising taxes on the wealthiest 2 percent is the right thing to do in light of our budget crisis” because “Tax cuts for high-income earners simply aren’t targeted at the vast majority of small businesses, and therefore won’t help them or their customers, the middle class.”

So take THAT, you psycho, supply-side, trinkle-down theorists!

According to Obama’s booklet, the president has worked with states to preserve 400,00 teaching jobs, expanded Pell Grants, created a $10,000 Opportunity Tax Credit, and demanded educational reforms from states in exchange for additional resources.

Revamping Education (points 12-15)

Here, the President states his strong case for increased education spending, starting with the dismal and well-known facts that over the next decade, more than half of jobs will require a two-year college certificate or four-year college degree, yet “the United States is just 14th in the world in the share of adults, age 25 to 34, holding college degrees and certificates.” First, Obama seeks to ensure that future college students have the education, skills, and financial wherewithal required for pursuing higher education. Second, he seeks to partner companies with schools to ensure that higher education prepares students for the right jobs.

The President’s ideas are as follows:

12. Cutting tuition growth in half over the next ten years. When the President assumed office, the recession (and Occupy Wall Street) shone a spotlight on the untenable debts incurred by today’s college students — and their families — struggling to cover rising tuition costs. In 2010, Obama signed the Student Aid and Fiscal Responsibility Act to end subsidies to private lenders and pass savings along to students via lower-interest college loans. He also created the $10,000 tax credit, he seeks to increase Pell Grants and other student aid, create incentives for schools to lower tuition, and increase funding for work-study jobs.

13. Recruiting and preparing 100,000 math and science teachers. Like most economics and labor experts, Obama believes our economic future lies in the STEM (Science, Technology, Engineering, and Mathematics) fields. To make us more competitive with technology powerhouse nations like Germany and China, the President wants to fund the recruiting, training, and hiring of 100,000 more math and science teachers at all levels of education. Obama would also fund a STEM Master Teacher Corps that would research and innovate best practices for teaching math and science. Hopefully, Obama and his supporters can find a way to sneak this past Representative Paul Broun (R-MD) and his many God-fearing colleagues, who fiercely oppose math and science.

14. Strengthen public schools in every community. This vague directive calls for smaller class sizes, as well as encouraging schools to find alternatives to No Child Left Behind‘s “teach to the test” mandate so they can “craft local solutions.” Alas, America’s emphasis on “local solutions” for K-12 education may be our greatest obstacle to the goal of universal, high-quality education for all children. I don’t mean to dump on President Obama, it’s just that schools are definitely where the rubber hits the road in America’s perennial debate over individual rights vs. collective responsibilities. At its best, localized funding and control of schools encourages civic participation, parent involvement, and a sense of community. At its worst, local funding and control of schools magnifies the ill effects of income inequality and poverty (along with the shortcomings of communities that teach creationism instead of science, value sports over academics, tolerate bullying, and allow corporal punishment in schools — but that’s a whole ‘nuther ball of wax).

At an astonishing 23.1%, the United States is Number 1 in the industrialized world for childhood poverty, according to the Economic Policy Institute. If only our academic rankings were this high.

The fact that the United States leads the industrialized world in child poverty and income inequality, while trailing behind in educational achievement, is no coincidence. Childhood poverty and poor academic performance are inextricably linked. According to Politifact, the U.S. ranks a disgraceful 26th in school peformance amongst industrialized (and even semi-industrialized) countries worldwide. Education experts, Helen F. Ladd and Edward B. Fisk, ask rhetorically in their 2011 New York Times Op Ed piece, “Can anyone credibly believe that the mediocre overall performance of American students on international tests is unrelated to the fact that one-fifth of American children live in poverty?” citing conclusive studies linking poverty to poor educational outcomes.

Elise Gould’s and Hilary Wething’s July 2012 report for the Economic Policy Institute shows that 23.1% of children in the United States currently live in poverty — the highest rate in the developed world. If you’re inclined to argue that this figure is unusually high due to the economic downturn, think again. A University of Michigan website on Poverty and Education shows the U.S. child poverty rate at a barely lower 21.9% in 2005 — second only to Mexico’s rate of 27.7% — back when most of us felt the economy was doing well. The author, Anthony Salas — perhaps then a disheveled grad student blinking in disbelief at his tuition bill and wiping the fog off his glasses as the steam rose from his evening meal of Ramen Noodles — poignantly adds, “When I look at this chart I am embarrassed and ashamed of this country.”

The U.S. spends less than any other industrialized county on taxes and transfers towards reducing the levels of childhood poverty, and predictably has fewer results, according to the Economic Policy Institute.

Furthermore, Gould’s and Wething’s study — tellingly entitled “U.S. poverty rates higher, safety net weaker than in peer countries,” shows that other industrialized countries further close the gap between childhood poverty and educational achievement through “resource allocation” and “tax and transfer programs” (or, as the “severe conservatives” say, “gifts for the undeserving 47%”). While the rest of the industrialized world invests in a 10.5% to 25.4% reduction in their already low rates of child poverty, America’s programs only lift a measly 9.7% above poverty level.

IMAGINARY VISUAL AID:
For people like me who need visual aids to grasp such concepts, visit an urban or rural Title 1 school with 400 students while they’re gathered for assembly; look at those little faces, and imagine that only 39 of those kids never have to worry about food, clothing, housing, or whether the lights will stay on.

Please note that even countries with appalling unemployment rates who’ve been hit way harder by the recession than we have — like Spain, Greece, Italy, and Japan — are way ahead of us on the child poverty and education fronts.

While Obama’s education proposals are sensible and fair, reducing childhood poverty is the only real way to improve our educational competitiveness. I’m sure Obama knows this — and his policies are certainly aimed at decreasing income equality and poverty — but we all know he can’t ever say that … not in this politically toxic day and age. We’d just better hope the President’s other 26 points work, so folks start making more money, so those danged malnourished poor kids stop messing up our world education rankings.

15. Train 2 million workers for real jobs. Technically, this bit about training doesn’t really count as a separate point, because Obama’s brochure already discusses training in point #4 as part of his plan to revive US manufacturing. But hey, who’s counting? As I mentioned in Part 1 of my ponderous tome (did I mention that AI pays its writers $1 per pound of verbiage?), partnerships that match career training with workplace needs would go a long way towards matching workers’ skills with employers’ needs.

In her 2011 Slate article – “Does Job Retraining Work?” — Ann Lawrie wrote that the answer depends on whether the unemployment is “cyclical” (temporary lack of demand) or “structural” (permanent shifts in the labor market). Today’s improving, but still sluggish, economy seems more like the latter. Lawrie mentions a survey conducted by The Manufacturing Institute which claims that two thirds of manufacturers had a “moderate to severe” shortage of workers in specialized, skilled trades. Although the study was originally conducted in 2001, more recent follow-ups in 2005 and 2011 confirm these findings.

As someone who graduated college with a Bachelor of Arts in English — an amazingly useless degree, despite the effusive praise I received for my fluency and correct pronunciation after only a few years of living away from my native country in Long Island, NY — I definitely appreciate the need for preparing students for jobs that actually exist. On the other hand, something about having the Manufacturing Institute design our college curriculum feels really sick and wrong to me. Of course they — and industry groups like them — should have a seat at the table.

But let’s not forget that job titles and buzzwords come and go, businesses hire today and fire tomorrow, and they DON’T know what skills our kids need for the future, they only know what skills they need RIGHT NOW.

Reducing The Deficit (points 16-18)

The President believes in shoring up America’s infrastructure and giving everyone a fair deal. But he also strongly believes that — after ten years of expensive and unnecessary wars, tax cuts for the rich, and other wasteful spending — we need to get serious about balancing the Federal deficit. Obama knows we can do that through targeted spending cuts, changing the tax code to ensure that everyone pays their fair share, and ending expensive and unnecessary wars. And this election proves that the majority of Americans agree with him.

Obama is working to reduce and eliminate the Federal deficit through the following policies:

16. Targeted spending cuts. The president has already signed $1 trillion in spending cuts into law last year and wants to cut more than $4 trillion over the next decade. But he wants everyone to bear the brunt of spending cuts fairly and, hence, proposes taxing the wealthy at higher rates (far from “soaking the rich,” the proposed rates would be similar to what they paid during the Reagan years), and then cutting $2.50 in spending for every $1 in additional revenue.

17. Ensuring everyone pays their fair share. Nearly everyone — including Warren Buffet and other notable members of the one percent — supports raising taxes on the wealthy so they’ll pay the same percent of their income in taxes as working people pay. This isn’t radical socialism, this is just a matter of plain fairness, and a total no-brainer.

18. Ending wars. Wars are REALLY expensive!!! By responsibly withdrawing troops and ending the wars Bush II started in Iraq and Afghanistan, we can reduce our deficit and still have enough money to put Americans back to work shoring up our crumbling infrastructure and doing some “nation-building” right here at home. Heaven knows, we seriously need to start rebuilding roads, bridges, runways, schools, parks, libraries, mass transit, and public spaces.

“It is up to you whether we go back to a health care system that lets insurance companies decide who to cover, when to cover it, whether they can drop you from your coverage whenever you need it most, or whether we keep moving forward with a law that is already cutting costs and covering more people and saving lives. They call it Obamacare. I like that name, because I do care.”

Reforming Healthcare (Points 19-22)

I don’t need to write a lot about this, because most of us progressive folks know about “Obamacare” and future plans for this historic legislation, and some of us hope it’ll be the camel’s nose under the tent for bringing the USA up to par with the rest of the civilized world. In the meantime, we need to step back and appreciate how “Obamacare” is an incredible achievement that was long overdue.

Points 19-22 are simple, but heartening:

19. Making health coverage accessible to all. Insurance companies can no longer bar individuals from coverage based on preexisting conditions.

20. Making healthcare affordable to all. Everyone has to sign up for health insurance. In return for the individual mandate and resulting more diverse and sustainable risk pools, insurance companies lower rates for everyone (Obamacare’s requirement that insurance companies spend at least 80% of revenues on direct healthcare also really helps).

21. Barring discriminatory pricing. Insurance companies can no longer charge women more for insurance policies because they happen to be women. Yay!

22. Help small businesses with premiums. As discussed in an earlier part of this article discussing small businesses, middle-class small business owners shouldn’t have to pay more to insure themselves, their family members and their employees, than larger companies do. The various reforms — including a small business buying exchange — will be hugely helpful towards helping small businesses provide health insurance to their employees and promoting full coverage.

Why haven’t we had this all along? Why did everyone give Hillary Clinton such a hard time for attempting this good deed years ago?

“I will never turn Medicare into a voucher. No American should ever have to spend their golden years at the mercy of insurance companies.They should retire with dignity and the respect that they’ve earned.” – Barack Obama

Protecting Retirement Security (Points 23-27)

Finally, we come to the part in Obama’s booklet where he defends “retirement security” — more commonly known as Social Security and Medicare. I don’t know who the idiot is that first spread the word that our government’s attacking Social Security and Medicare and demanded they “Keep their hands off of our Medicare,” but Obama did a good job of keeping Mittens’ mitts off these highly successful programs.

As a quick refresher-course, Social Security is a program we pay into with a percentage of our pay checks throughout our working lives, and withdraw from when we are of retirement age, disabled, or no longer able to work. It provides the elderly and disabled with a stipend and other modest benefits. Medicare has the same funding mechanism, and ensures access to medical care for people who are elderly, disabled, or otherwise unable to earn enough to pay for health coverage.

Obama’s plans for protecting retirement security are fairly straightforward and boil down to protecting these programs against conservative encroachments.

23. Protecting Social Security. We’ve all paid into the system for all of our working lives, and we all have every right to assume Social Security will be there for us throughout the foreseeable future.

24. Protecting Medicare. Continue to ensure health coverage and access to basic healthcare for social security recipients, disabled people, and children without other health coverage.

The New Economic Patriotism: A Look At Obama’s 27-Point Economic Plan
This is PART 2 (Small businesses, education, deficit, healthcare, and social security) | If you missed the first part, please click HERE to read PART 1 (Manufacturing and energy)